Exclusions differ from one insurer to another, and checking them is part of our work before we recommend a policy to you.
A truck carrying your goods overturns on a regional road and the load is destroyed. The carrier is liable under the CMR Convention, but only up to a limited amount per kilogram of gross weight, which for electronics or pharmaceuticals covers a small fraction of the value. A cargo policy pays out the invoice value of the goods plus the agreed freight costs.
You buy goods on FCA terms, which means risk passes to you as soon as the goods are handed to the first carrier abroad. If the loss happens on the way to Serbia, the seller has no obligation to compensate you. That is why, before placing a policy, we check which rule your contract uses and from which point the cover has to start.
The shipment arrives by sea and part of the cargo is damaged by moisture inside the container. If the cause was inadequate packing, the claim is normally declined; if the cause was an external event, it is accepted. This is why we insist on a written report and photographs at delivery, since that documentation decides the outcome of the claim.
The examples are illustrative and show how the cover works in practice.
The carrier insures its own liability, not your goods. That liability is capped under the CMR Convention per kilogram of gross weight and is excluded in a number of situations, force majeure among them. A cargo policy insures the goods at their real value and pays you directly, without waiting for the outcome of a dispute with the carrier.
Incoterms rules set the moment when risk in the goods passes from seller to buyer. Under EXW and FCA risk passes early, so the buyer needs cover for almost the whole journey, while under DAP and DDP risk stays with the seller until delivery. Under CIF the seller must arrange insurance, but only at minimum cover, which is often not enough for higher value goods.
Either way works. For occasional shipments we place a single transit policy, and for companies that ship regularly we set up an annual contract with monthly declarations of dispatched goods. The annual contract is usually cheaper and removes the risk of someone forgetting to declare a shipment before it leaves.
The basis is normally the invoice value of the goods, plus freight, customs duties and other incidental costs, and sometimes an agreed percentage for expected profit. The sum insured must match the real value of the consignment, because if it is set too low the compensation is reduced proportionally.
Note the damage on the transport document before you sign for delivery, photograph the goods and the packaging, and notify the insurer and the carrier immediately. Do not dispose of the damaged goods or the packaging until they have been surveyed. If you placed the policy through us, we file the claim and deal with the insurer for you.
Send us a short enquiry. We collect offers from every insurer that covers this risk and explain the differences before you sign anything.
